With Department Stores Disappearing, Malls Could Be Next - The New York Times - 0 views
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The standard American mall — with its vast parking lots, escalators and air conditioning, and an atmosphere heavy on perfume samples and the scent of Mrs. Fields cookies — was built around department stores. But the pandemic has been devastating for the retail industry and many of those stores are disappearing at a rapid clip. Some chains are unable to pay rent and prominent department store chains including Neiman Marcus, as well as J.C. Penney, have filed for bankruptcy protection. As they close stores, it could cause other tenants to abandon malls at the same time as large specialty chains like Victoria’s Secret are shrinking.
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Malls were already facing pressure from online shopping, but analysts now say that hundreds are at risk of closing in the next five years. That has the potential to reshape the suburbs, with many communities already debating whether abandoned malls can be turned into local markets or office space, even affordable housing.
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Many small mall retailers have clauses in their leases — so-called co-tenancy clauses — that allow them to pay reduced rent or even break the lease if two or more anchor stores leave a location.
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Mr. Tibone said he was pessimistic about the ability of most malls to fill vacant spaces, especially during the pandemic. Entertainment options like Dave & Buster’s are off the table, for instance.
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Macy’s, which also owns Bloomingdale’s, said in February that it would close 125 stores in “lower-tier malls” during the next three years, and Nordstrom just recently said it would close 16 of its 116 full-line department stores. While Neiman Marcus, which filed for bankruptcy in May, said it plans to reopen all its stores, landlords are watching warily.
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Already this year, Victoria’s Secret said it would close 250 stores in North America, while the Gap brand is closing at least 170 stores globally. Financial troubles are plaguing mall chain companies like Ascena Retail, which owns Ann Taylor and Loft, and the owner of New York & Company. And bankruptcies since early 2019 have included mall staples like Forever 21, Things Remembered, Payless ShoeSource and GNC. Lucky Brand Dungarees filed for bankruptcy on Friday.